Strategic Hotels & Resorts, Inc is an equity real estate investment trust. The firm invests in the real estate markets of the United States. It is owner and asset manager of the highest quality portfolio of upper-upscale and luxury hotels and resorts. The firm was formerly known as Strategic Hotel Capital Inc. Strategic Hotels & Resorts, Inc was founded in 1997 and is based in Chicago, Illinois.
Take a look at the 1-year chart of Strategic (NYSE: BEE) with the added notations:
Over the last 3 months, BEE has been consolidating within a couple of short-term price levels. First, the stock has formed a clear support level at $11.25 (blue). Next, the stock has also been forming a down trending resistance level (red), which has now been tested 4 different times. These two levels combined have BEE stuck within a common chart pattern known as a descending triangle that will eventually have to break one way or another.
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The Tale of the Tape: BEE is currently trading within a descending triangle. A long trade could be made on a break above the down trending resistance or a pullback to the $11.25 support. A short trade could be placed on BEE if the stock breaks below the $11.25 support level.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach